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    Topic: "Financial Markets and Institutions"

    42 publications with a total of 132 open recommendations including 3 priority recommendations
    Director: Lawrance Evans, Jr.
    Phone: (202) 512-8678

    6 open recommendations
    Recommendation: As the Board of Governors implements plans to develop an ERM framework, it should include a component to identify and assess risks of regulatory capture across the LISCC program. (Recommendation 1)

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Board of Governors should finalize and implement program-wide guidance for the LISCC Reserve Banks on implementing LISCC policies. (Recommendation 2)

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Board of Governors should finalize and implement a mechanism to monitor and regularly assess Reserve Banks' implementation of LISCC policies and procedures. (Recommendation 3)

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Board of Governors should streamline its conflict-of-interest disclosure review process for participants in the LISCC program, such as by storing disclosure information in compatible electronic systems. (Recommendation 4)

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Board of Governors should systematically collect and maintain information on the institutions supervisory employees work for before they are hired by the Federal Reserve and their employment destination when they leave. (Recommendation 5)

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Board of Governors should conduct a periodic self-assessment of ethics programs, policies, and procedures that apply to LISCC program participants. (Recommendation 6)

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Jeszeck, Charles A
    Phone: (202) 512-7215

    1 open recommendations
    Recommendation: Congress should consider establishing an independent commission to comprehensively examine the U.S. retirement system and make recommendations to clarify key policy goals for the system and improve how the nation can promote more stable retirement security. We suggest that such a commission include representatives from government agencies, employers, the financial services industry, unions, participant advocates, and researchers, among others, to help inform policymakers on changes needed to improve the current U.S. retirement system.

    Agency: Congress
    Status: Open

    Comments: When we determine what steps the Congress has taken, we will provide updated information.
    Director: Michael Clements
    Phone: (202) 512-8678

    4 open recommendations
    Recommendation: The Chief Investment Officer of the Army and Air Force Exchange Service should fully implement key practices to increase opportunities for MWO asset managers as part of its selection processes. Specifically, the Chief Investment Officer should complete actions related to top leadership commitment and removing potential barriers. (Recommendation 1)

    Agency: Department of Defense: Army and Air Force Exchange Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Chief Investment Officer of the Federal Retirement Thrift Investment Board should use key practices as appropriate to increase opportunities for MWO asset managers if and when implementing its mutual fund window platform. Specifically, the Chief Investment Officer should take actions to demonstrate top leadership commitment, remove potential barriers, conduct outreach to MWO firms, and communicate its priorities and expectations for an inclusive selection process to its staff and consultants if and when it begins to search for a mutual fund window platform. (Recommendation 2)

    Agency: Federal Retirement Thrift Investment Board
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Chief Investment Officer of the Navy Exchange Service Command should fully implement key practices to increase opportunities for MWO asset managers as part of its selection processes. Specifically, the Chief Investment Officer should take actions to demonstrate top leadership commitment, and to the extent that staff and resources are a constraint, should direct its consultant to conduct outreach to MWO firms and communicate its priorities and expectations for an inclusive selection process by requesting its consultant conduct more inclusive asset manager searches specifically for the Navy Exchange Service Command. (Recommendation 3)

    Agency: Department of Defense: Department of the Navy: Navy Exchange Service Command
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: The Chief Investment Officer of the Tennessee Valley Authority Retirement System should fully implement key practices to increase opportunities for MWO asset managers as part of its selection processes. Specifically, the Chief Investment Officer should take actions to demonstrate top leadership commitment, and to the extent that staff and resources are a constraint, should direct its consultant to conduct outreach to MWO firms and communicate its priorities and expectations for an inclusive selection process by requesting its consultant conduct more inclusive asset manager searches specifically for the Tennessee Valley Authority Retirement System. (Recommendation 4)

    Agency: Tennessee Valley Authority: Retirement System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Gregory C. Wilshusen
    Phone: (202) 512-6244

    2 open recommendations
    Recommendation: To effectively manage its information security program, the Chairman of the SEC should maintain up-to-date network diagrams and asset inventories in the system security plans for General Support System and a key financial system to accurately and completely reflect the current operating environment.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To effectively manage its information security program, the Chairman of the SEC should perform continuous monitoring using automated configuration and vulnerability scanning on the operating systems, databases, and network devices.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Nick Marinos
    Phone: (202) 512-9342

    1 open recommendations
    Recommendation: To help improve the corporation's implementation of its information security program, the Chairman of FDIC should direct the Chief Information Officer to update the procedure for granting access to the key financial application, to include responsibilities and steps for ensuring that the access privileges granted have been approved by the users' supervisor.

    Agency: Federal Deposit Insurance Corporation
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Alicia Puente Cackley
    Phone: (202) 512-8678

    3 open recommendations
    Recommendation: To help state credit union supervisors and privately insured credit unions better interpret Regulation I and inform consumers when an institution is not federally insured, CFPB should issue guidance to clarify whether drive-through windows require disclosures.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help state credit union supervisors and privately insured credit unions better interpret Regulation I and inform consumers when an institution is not federally insured, CFPB should issue guidance to describe what constitutes clear and conspicuous disclosure, including minimum signage dimensions and font size for disclosures.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help state credit union supervisors and privately insured credit unions better interpret Regulation I and inform consumers when an institution is not federally insured, CFPB should issue guidance to explain and provide examples of which communications are advertising.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Michael Clements
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To promote transparency and accountability of federal spending, the Commissioner of the Fiscal Service should make basic information about Fiscal Service's use of financial agents publicly available in a central location, including compensation paid to each financial agent under its financial agency agreement and a description of the services provided.

    Agency: Department of the Treasury: Bureau of the Fiscal Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Michael E. Clements
    Phone: (202) 512-8678

    2 open recommendations
    Recommendation: To help SEC address identified personnel management challenges, the Chair should enhance or expand the responsibilities and authority of the COO or other official or office so they can help ensure that improvements to communication and collaboration across SEC are made. For instance, if the duties of the COO were expanded, the COO could establish liaisons in each mission-critical office and division for SEC employees to contact or develop procedures to help facilitate communication and collaboration among the mission-critical office and divisions.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help SEC address identified personnel management challenges, the Chair should develop and implement training for hiring specialists that is informed by a skills gap analysis.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Susan Irving
    Phone: (202) 512-6806

    1 open recommendations
    Recommendation: To ensure that the reserve target SEC set for PCAOB safeguards against realistic risks and probable contingencies, including potential unforeseen funding delays, the SEC Chair, in exercising the commission's authority to oversee PCAOB, should analyze--and document the analysis of--program needs and probable contingencies, in consultation with PCAOB as appropriate.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: The Securities and Exchange Commission (SEC) reported in January 2017 that it will coordinate further with Public Company Accounting Oversight Board (PCAOB) staff as the PCAOB analyzes, with review by the SEC, their program costs and risks to ensure that the operating reserve reflects current needs and probable contingencies and that the analysis is documented.
    Director: Lawrance L. Evans, Jr.
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To reduce uncertainty and provide FHFA sufficient direction for carrying out its responsibilities as conservator of the enterprises, Congress should consider legislation that establishes objectives for the future federal role in housing finance, including the structure of the enterprises, and a transition plan to a reformed housing finance system that enables the enterprises to exit conservatorship.

    Agency: Congress
    Status: Open

    Comments: As of April 13, 2017, Congress has not taken action on this matter. In its 2017 Oversight Plan, the House Financial Services Committee stated that "the Committee will examine proposals affecting the operations of Fannie Mae and Freddie Mac, including consolidating their business operations, winding down their legacy business commitments, and repealing their statutory charters."
    Director: Lawrance L. Evans, Jr.
    Phone: (202) 512-8678

    17 open recommendations
    Recommendation: To help improve the consistency of federal banking regulators' stress test requirements and help ensure that institutions overseen by different regulators receive consistent regulatory treatment, the heads of the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency should harmonize their agencies' approach to granting extensions and exemptions from stress test requirements.

    Agency: Department of the Treasury: Office of the Comptroller of the Currency
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help improve the consistency of federal banking regulators' stress test requirements and help ensure that institutions overseen by different regulators receive consistent regulatory treatment, the heads of the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency should harmonize their agencies' approach to granting extensions and exemptions from stress test requirements.

    Agency: Federal Deposit Insurance Corporation
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help improve the consistency of federal banking regulators' stress test requirements and help ensure that institutions overseen by different regulators receive consistent regulatory treatment, the heads of the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency should harmonize their agencies' approach to granting extensions and exemptions from stress test requirements.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help provide stronger incentives for companies to perform company-run stress tests in a manner consistent with Federal Reserve goals, the Federal Reserve should remove company-run stress tests from the CCAR quantitative assessment.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To increase transparency and improve CCAR effectiveness, the Federal Reserve should publicly disclose additional information that would allow for a better understanding of the methodology for completing qualitative assessments, such as the role of ratings and rankings and the extent to which they affect final determination decisions.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To increase transparency and improve CCAR effectiveness, the Federal Reserve should, for future determinations to object or conditionally not object to a company's capital plan on qualitative grounds, disclose additional information about the reasons for the determinations.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To increase transparency and improve CCAR effectiveness, the Federal Reserve should publicly disclose, on a periodic basis, information on capital planning practices observed during CCAR qualitative assessments, including practices the Federal Reserve considers stronger or leading practices.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To increase transparency and improve CCAR effectiveness, the Federal Reserve should improve policies for official responses to CCAR companies by establishing procedures for notifying companies about time frames relating to Federal Reserve responses to company inquiries.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To strengthen the scenario design process, the Federal Reserve should assess--and adjust as necessary--the overall level of severity of its severely adverse scenario by establishing a process to facilitate proactive consideration of levels of severity that may fall outside U.S. postwar historical experience.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To strengthen the scenario design process, the Federal Reserve should assess--and adjust as necessary--the overall level of severity of its severely adverse scenario by expanding consideration of the trade-offs associated with different degrees of severity.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To improve understanding of the range of potential crises against which the banking system would be resilient and the outcomes that might result from different scenarios, the Federal Reserve should assess whether a single severe supervisory scenario is sufficient to inform CCAR decisions and promote the resilience of the banking system. Such an assessment could include conducting sensitivity analysis involving multiple severe supervisory scenarios--potentially using CCAR data for a cycle that is already complete, to avoid concerns about tailoring the scenario to achieve a particular outcome.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help ensure that Federal Reserve stress tests do not amplify future economic cycles, the Federal Reserve should develop a process to test its proposed severely adverse scenario for procyclicality annually before finalizing and publicly releasing the supervisory scenarios.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To improve the Federal Reserve's ability to manage model risk and ensure that decisions based on supervisory stress test results are informed by an understanding of model risk, the Federal Reserve should apply its model development principles to the combined system of models used in the supervisory stress tests.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To improve the Federal Reserve's ability to manage model risk and ensure that decisions based on supervisory stress test results are informed by an understanding of model risk, the Federal Reserve should create an appropriate set of system-level model documentation, including an overview of how component models interact and key assumptions made in the design of model interactions.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To improve the Federal Reserve's ability to manage model risk and ensure that decisions based on supervisory stress test results are informed by an understanding of model risk, the Federal Reserve should design and implement a process to test and document the sensitivity and uncertainty of the model system's output--the post-stress capital ratios used to make CCAR quantitative assessment determinations--including, at a minimum, the cumulative uncertainty surrounding the capital ratios and their sensitivity to key model parameters, specifications, and assumptions from across the system of models.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To improve the Federal Reserve's ability to manage model risk and ensure that decisions based on supervisory stress test results are informed by an understanding of model risk, the Federal Reserve should design and implement a process to communicate information about the range and sources of uncertainty surrounding the post-stress capital ratio estimates to the Board during CCAR deliberations.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To improve the Federal Reserve's ability to manage model risk and ensure that decisions based on supervisory stress test results are informed by an understanding of model risk, the Federal Reserve should design and implement a process for the Board and senior staff to articulate tolerance levels for key risks identified through sensitivity testing and for the degree of uncertainty in the projected capital ratios.

    Agency: Federal Reserve System
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Melissa Emrey-Arras
    Phone: (617) 788-0534

    5 open recommendations
    Recommendation: To help ensure quality information is conveyed to servicemembers about how the Servicemembers Civil Relief Act (SCRA) interest rate cap applies to student loans, the Secretary of Defense should direct the secretaries of each service branch, and work with other secretaries as appropriate, to ensure that all information about the SCRA interest rate cap for student loans is accurate when provided to servicemembers and to those who work with servicemembers to help them obtain SCRA benefits, including information contained in outreach materials.

    Agency: Department of Defense
    Status: Open

    Comments: The Department of Defense (DOD) disagreed with this recommendation believing it to be unnecessary because it is already providing accurate information. Specifically, DOD noted that the information provided in several documents GAO reviewed is accurately based on statute whereas Education's updated requirement to automatically apply the cap is based on policy that could change in the future. Moreover, the automated process applies only to federal and commercial FFEL student loans in contrast to other types of debt. DOD said that providing information based on statute rather than policy would cause less confusion and was a better approach than what we recommend. However, our report noted that Education formalized the automated process through federal regulations, effective July 2016, which legally require servicers to use this process for all federal and commercial FFEL loans. In addition, DOD said it was unable to verify whether DOD's Military OneSource website inaccurately states that the SCRA rate cap does not apply to commercial FFEL loans. However, our searches of the website still turned up this inaccuracy. DOD said it would look into a means of verifying website information but that in the meantime, it is satisfied that its training provides correct information. Given that Military OneSource is a key source of information for servicemembers and that some documents DOD provided state that the SCRA rate cap does not apply to student loans, we continue to believe that servicemembers are not always receiving accurate and up-to-date information.
    Recommendation: To ensure that all eligible servicemembers with student loans receive the SCRA interest rate cap, the Attorney General should direct the Department of Justice to consider modifying its proposed changes to SCRA to require use of the automatic eligibility check for private student loans.

    Agency: Department of Justice: Office of the Attorney General
    Status: Open

    Comments: The Department of Justice (DOJ) stated that its current package of proposed legislative changes provides benefits to servicemembers with all kinds of loans, including private student loans. Rather than requiring servicemembers to submit written notice and a copy of military orders, they need only give oral or written notice of eligibility for the cap to their creditors. Creditors would then have to search the Department of Defense's records to verify the servicemembers' military service and apply the SCRA interest rate cap, when applicable. DOJ believes that these changes would significantly benefit all servicemembers with loans while providing a uniform standard for all types of creditors. The department added that it will consider its proposed changes to SCRA in future legislative proposals and plans to obtain feedback from stakeholders on how to improve SCRA's protections for servicemembers. However, as stated in our report, servicemembers with private student loans would still need to be aware of the rate cap in order to give notice, whether written or oral. Therefore, we encourage DOJ to consider updating its current proposal to require use of the automatic eligibility check by all student loan lenders and servicers. Not only would this ensure that servicemembers with private student loans receive a benefit for which they are eligible, but also that the interest rate cap is applied consistently across all types of student loans. The agency said that it would consider these changes to the SCRA in future legislative proposals and plans to obtain feedback from stakeholders on how the agency can propose to improve the SCRA's protections for servicemembers. However, as stated in our report, servicemembers with private student loans would still need to be aware of the rate cap in order to give notice, whether written or oral. Therefore, we encourage DOJ to consider updating its current proposal to require use of the automatic eligibility check by all student loan lenders and servicers. Not only would this ensure that servicemembers with private student loans receive a benefit for which they are eligible, but also that the interest rate cap is applied consistently across all types of student loans.
    Recommendation: To enhance customer service, the Secretary of Education should direct the Office of Federal Student Aid to identify ways to modify the data collected in its unified borrower complaint system to allow the agency to more precisely identify and analyze complaints specifically about the SCRA interest rate cap.

    Agency: Department of Education
    Status: Open

    Comments: The Department of Education said it is committed to accurately tracking the types of complaints it receives and will create a complainant subcategory for SCRA under the "Military and Veterans Benefit" category. In addition, it will continue to run periodic key word searches to identify other complaints that may have been miscategorized by the complainant, related to the requirements of the SCRA, and ensure that they are considered appropriately. GAO will consider closing this recommendation when the department has provided evidence that it has completed these efforts.
    Recommendation: To better ensure that servicemembers with private student loans benefit from the SCRA interest rate cap, the Director of the Consumer Financial Protection Bureau and the Attorney General of the Department of Justice should coordinate with each other, and with the four federal financial regulators, as appropriate, to determine the best way to ensure routine oversight of SCRA compliance for all nonbank private student loan lenders and servicers. If CFPB and DOJ determine that additional statutory authority is needed to facilitate such oversight, CFPB and DOJ should develop a legislative proposal for Congress.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: The Consumer Financial Protection Bureau (CFPB) stated that it is committed to working with the Department of Justice (DOJ) and federal financial regulators, when possible, to facilitate oversight of SCRA compliance and that it will support all relevant federal agencies in using their respective authorities to identify and address SCRA violations as efficiently and effectively as possible. While CFPB coordinates with DOJ and other federal regulators in general, there is still no single agency authorized to enforce SCRA compliance among nonbank private student loan lenders and servicers, and no entity is conducting onsite supervisory reviews of these lenders and servicers. In addition, while CFPB may refer complaints from servicemembers about the SCRA rate cap for private student loans to DOJ and other financial regulators, we believe this does not constitute routine, proactive oversight and also presumes servicemembers are aware of the SCRA rate cap. GAO will consider closing this recommendation when the bureau has provided evidence of actions it has taken to facilitate routine oversight of SCRA compliance for all nonbank private student loan lenders and servicers.
    Recommendation: To better ensure that servicemembers with private student loans benefit from the SCRA interest rate cap, the Director of the Consumer Financial Protection Bureau and the Attorney General of the Department of Justice should coordinate with each other, and with the four federal financial regulators, as appropriate, to determine the best way to ensure routine oversight of SCRA compliance for all nonbank private student loan lenders and servicers. If CFPB and DOJ determine that additional statutory authority is needed to facilitate such oversight, CFPB and DOJ should develop a legislative proposal for Congress.

    Agency: Department of Justice: Office of the Attorney General
    Status: Open

    Comments: The Department of Justice (DOJ) believes that it is in full compliance with this recommendation and that the four federal financial regulators do not have statutory authority to examine nonbank private student loan lenders and servicers unaffiliated with a depository institution. DOJ stated that it already coordinates extensively with the Consumer Financial Protection Bureau (CFPB) and the financial regulators concerning SCRA compliance through such mechanisms as referrals from CFPB for any SCRA-related violations and access to its consumer complaint database, and regular meetings with CFPB, and that it will continue to be built upon these efforts. While these mechanisms are commendable, GAO believes they do not constitute exercising routine oversight of nonbank private student loan lenders and servicers who are not affiliated with a depository institution. We believe that additional interagency coordination, including working with CFPB to seek additional statutory authority, as needed, is necessary to ensure routine SCRA compliance.
    Director: Lawrance Evans
    Phone: (202) 512-8678

    2 open recommendations
    Recommendation: To provide greater assurance that the Federal Reserve is complying with the Monetary Control Act's requirement to establish fees on the basis of costs actually incurred and an allocation of imputed private-sector costs, the Chair of the Federal Reserve Board of Governors of the Federal Reserve System should consider ways to incorporate the costs related to integrated planning for recovery and wind down and compliance with antimoney-laundering requirements, to the extent practicable, in its imputed private-sector cost methodology.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To provide greater assurance that the Federal Reserve is complying with the Monetary Control Act's requirement to establish fees on the basis of costs actually incurred and an allocation of imputed private-sector costs, the Chair of the Federal Reserve Board of Governors of the Federal Reserve System should periodically obtain independent testing of the methods the Federal Reserve uses to capture its actual costs and simulate those of the private sector.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Kimberly M. Gianopoulos
    Phone: (202) 512-8612

    1 open recommendations
    including 1 priority recommendation
    Recommendation: To improve the effectiveness of the SEC's conflict minerals disclosure rule, the Secretary of Commerce should submit to the appropriate congressional committees a plan outlining steps that Commerce will take, with associated time frames, to (1) assess the accuracy of the independent private sector audits (IPSA) and other due diligence processes described under section 13(p) of the Securities Exchange Act of 1934; (2) develop recommendations for the process used to carry out such audits, including ways to improve the accuracy of the audits and establish standards of best practices for such audits; and (3) acquire the necessary knowledge, skills, and abilities to carry out these responsibilities.

    Agency: Department of Commerce
    Status: Open
    Priority recommendation

    Comments: Commerce agreed with this recommendation. In response to this recommendation, Commerce indicated in an October 25, 2016 letter to GAO that it has developed a three-step approach which parallels the three distinct elements of the recommendation. To fully implement this recommendation, Commerce needs to submit the said three-step plan, including associated timeframes for their completion, to the appropriate congressional committees. Section 1502 of the Dodd-Frank Act defines "appropriate committees" to mean the Committee on Appropriations, the Committee on Foreign Affairs, the Committee on Ways and Means, and the Committee on Financial Services of the House of Representatives; and the Committee on Appropriations, the Committee on Foreign Relations, the Committee on Finance, and the Committee on Banking, Housing, and Urban Affairs of the Senate.
    Director: Gregory C. Wilshusen
    Phone: (202) 512-6244

    1 open recommendations
    Recommendation: To help improve the corporation's implementation of its information security program, the Chairman of FDIC should direct the Chief Information Officer develop and implement a policy that requires monitoring changes to critical files for the platforms identified during the audit.

    Agency: Federal Deposit Insurance Corporation
    Status: Open

    Comments: According to officials in FDIC's Division of Information Technology, the corporation plans to implement a new solution in 2017 to enable security personnel to identify users making file system changes. Subsequent to FDIC implementing a new solution, we plan to validate FDIC's actions.
    Director: Malenich, J Lawrence
    Phone: (202) 512-3406

    5 open recommendations
    Recommendation: To provide reasonable assurance that the property, equipment, and software transactions are properly tracked and capitalized or expensed as appropriate, the Director of CFPB should direct the program offices to require vendors to provide detailed invoices with costs broken out by project.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: During our fiscal year 2016 audit, we continued to find control deficiencies over CFPB's accounting for its property, equipment, and software. CFPB was still in the process of working with its Office of Procurement and program offices to require more detailed invoices with costs broken out by project. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: To provide reasonable assurance that the property, equipment, and software transactions are properly tracked and capitalized or expensed as appropriate, the Director of CFPB should direct the Chief Financial Officer to update OCFO's financial records to include costs by project.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: Although CFPB took actions to attempt to address this recommendation, as of September 30, 2016, there were still some unidentified costs in the OCFO's financial records. In addition, our fiscal year 2016 audit continued to identify deficiencies over the recording of property, equipment, and software costs. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: The Director of CFPB should direct the Office of Technology and Innovation's Chief Information Officer to develop and document training materials that are consistent with CFPB's policies and procedures and provide training to employees, on a recurring basis, on how to conduct inventory of electronic equipment and how to update and maintain accurate inventory records.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: During our fiscal year 2016 audit, we continued to find incomplete and inaccurate information in CFPB's inventory records. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: The Director of CFPB should direct the Chief Financial Officer and Chief Information Officer to develop and implement procedures that require coordination between the OCFO and the Office of Technology and Innovation to provide reasonable assurance that the records maintained by both divisions are accurate, consistent, complete, and comparable for inventory and accounting purposes.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: During our fiscal year 2016 audit, we continued to find incomplete and inaccurate information in CFPB's inventory records. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: The Director of CFPB should direct the Chief Financial Officer to design and implement effective procedures over the preparation of CFPB financial statements and note disclosures, including procedures such as completing the FAM 2010 and 2020 checklists at fiscal year-end, to provide reasonable assurance that the financial statements as of fiscal year-end are prepared in accordance with GAAP and note disclosures are adequate.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: During our fiscal year 2016 audit, we continued to find errors and inconsistent disclosures in CFPB's financial statements, some of which resulted in post-closing adjusting entries. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Director: Daniel Garcia-Diaz
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: In order to ensure sustained leadership commitment to and accountability for CFPB's efforts to promote a diverse, inclusive, and fair workplace, in coordination with representatives of CFPB's employee union, the Director should develop tools to collect more comprehensive employee feedback on the grievance complaint processes to understand and remedy factors that may reduce employee confidence in these processes.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: As of May 2017, CFPB had reached agreement with its employee union on a process to collect more comprehensive employee feedback on its grievance complaint processes, but CFPB had not yet implemented this new process. This new process will include a short survey that will be provided to employees who participate in the grievance process. A CFPB official said that CFPB will begin using this survey to collect feedback once it has determined the best point in the grievance process to distribute it.
    Director: Gregory C. Wilshusen
    Phone: (202) 512-6244

    4 open recommendations
    Recommendation: To more effectively manage its information security program, the Chair should direct the Chief Information Officer to document artifacts that support recommendation closure consistent with SEC policy.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In its response to our draft report, SEC concurred with the recommendation. However, SEC has not yet provided sufficient evidence that it has implemented the recommendation.
    Recommendation: To more effectively manage its information security program, the Chair should direct the Chief Information Officer to document a comprehensive physical inventory of the systems and applications in the production environment.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In its response to our draft report, SEC concurred with the recommendation. However, SEC has not yet provided sufficient evidence that it has implemented the recommendation.
    Recommendation: To more effectively manage its information security program, the Chair should direct the Chief Information Officer to provide personnel appropriate access to continuous monitoring reports and tools to monitor, evaluate, and remedy identified weaknesses.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In its response to our draft report, SEC concurred with the recommendation. However, SEC has not yet provided sufficient evidence that it has implemented the recommendation.
    Recommendation: To more effectively manage its information security program, the Chair should direct the Chief Information Officer to institute a process and assign the necessary personnel to review information produced by the vulnerability scanning tools to monitor, evaluate, and remedy identified weaknesses.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In its response to our draft report, SEC concurred with the recommendation. However, SEC has not yet provided sufficient evidence that it has implemented the recommendation.
    Director: Dave Wise
    Phone: (202) 512-5731

    2 open recommendations
    Recommendation: To help ensure that the CFTC makes cost-effective leasing decisions, and considers options for reducing future lease costs, prior to entering into any new or expanded lease agreements, the Chairman of the CFTC should ensure that as CFTC revises its leasing policies and procedures, it includes comprehensive details on lease procurement that are consistent with leading government guidance and standards to assure cost-effective decisions.

    Agency: Commodity Futures Trading Commission
    Status: Open

    Comments: On July 5, 2017, CFTC told us that in August, 2016, it had entered into a Memorandum of Understanding (MOU) with the General Services Administration (GSA), whereby GSA will procure and administer all new leases for CFTC consistent with GSA policies and procedures. The MOU provides a framework by which GSA will apply its expertise in the leasing field to satisfy CFTC's real property space requirements, while ensuring compliance with appropriations laws and regulations applicable to real property transactions. GSA will procure new CFTC leases consistent with CFTC's demonstrated needs and requirements, GSA's practices and procedures as well as relevant statutes, Executive Orders, and supplemental agency policies and guidance. As part of its service offering, GSA will work with CFTC to maximize and increase efficiency in its planning for future space requirements and to consider alternatives to acquiring additional office space, such as consolidation, co-location, teleworking, and hoteling. CFTC has retained all responsibilities for its existing leases, but will leverage GSA's experience for administering them. Through the MOU, GSA will consult with and advise CFTC in administering its existing leases, which may also include implementing one or more of the initiatives described above for maximizing the efficiency of CFTC's current leasing inventory.
    Recommendation: To help ensure that the CFTC makes cost-effective leasing decisions, and considers options for reducing future lease costs, prior to entering into any new or expanded lease agreements, the Chairman of the CFTC should establish a timeline for evaluating and documenting options to potentially improve space utilization and reduce leasing costs including, but not restricted to, (1) moving offices to less costly locations, (2) implementing enhanced telework, and (3) consolidating the Kansas City and Chicago regional offices.

    Agency: Commodity Futures Trading Commission
    Status: Open

    Comments: On July 5, 2017, CFTC said that it does not have any plans, at this time, to relocate or consolidate its offices. However, CFTC said that as it enters the planning phase for acquiring new space, as its existing leases expire, beginning in April 2018, it will perform a comprehensive review of its space needs and utilization.
    Director: Mathew Scirè
    Phone: (202) 512-8678

    8 open recommendations
    Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to enhance screening of loan guarantee applicants, the Secretary of Agriculture should direct the Undersecretary for Rural Development to complete steps to obtain access to Treasury's Do Not Pay portal and establish policies and procedures to deny loan guarantees to applicants who are subject to administrative offsets for delinquent child support payments.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of August 2017, Rural Development said it was in the process of gaining access to Treasury's Do Not Pay portal in order to conduct the recommended screening of loan guarantee applicants.
    Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen oversight of lenders and servicers, the Secretary of Agriculture should direct the Undersecretary for Rural Development to develop and publish in the Federal Register qualification requirements for the principal officers of lenders and servicers seeking initial or continued approval to participate in the guarantee program.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of August 2017, Rural Development said it had drafted a regulatory work plan to propose qualification requirements for principal officers of lenders and servicers.
    Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen oversight of lenders and servicers, the Secretary of Agriculture should direct the Undersecretary for Rural Development to develop and publish in the Federal Register capital and financial requirements for guarantee program lenders that are not regulated by a federal financial institution regulatory agency.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of August 2017, Rural Development said it had drafted a regulatory work plan to propose lender capital and financial requirements.
    Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen oversight of lenders and servicers, the Secretary of Agriculture should direct the Undersecretary for Rural Development to establish standing policies and procedures to help ensure that the agency reviews the eligibility of lenders and servicers participating in the guarantee program at least every 2 years.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of August 2017, Rural Development said it was planning to automate reviews of lender eligibility every 2 years, but in the meantime was using a manual process. We will update the status of this recommendation when Rural Development provides standing policies and procedures regarding the frequency of its lender and servicer eligibility reviews.
    Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen risk assessment and reporting, the Secretary of Agriculture should direct the Undersecretary for Rural Development to improve performance measures comparing RHS and the Federal Housing Administration loan performance, potentially by making comparisons on a cohort basis and limiting comparisons to loans made in similar geographic areas.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of August 2017, Rural Development said it had hired a contractor to develop more meaningful performance measures.
    Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen risk assessment and reporting, the Secretary of Agriculture should direct the Undersecretary for Rural Development to develop risk thresholds for the guarantee program, potentially in the form of maximum portfolio- or loan-level loss tolerances.

    Agency: Department of Agriculture
    Status: Open

    Comments: Rural Development hired a contractor to help establish risk thresholds for the guarantee program. The contractor's October 2016 report developed and recommended portfolio-level and loan-level risk thresholds (values that trigger consideration of policy adjustments) and also recommended that program officials conduct stress tests to validate that each recommended risk threshold was appropriate for the program's overall risk appetite. As of August 2017, Rural Development had not provided documentation that it had validated and implemented the risk thresholds.
    Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to strengthen risk assessment and reporting, the Secretary of Agriculture should direct the Undersecretary for Rural Development to identify issues for increased management focus in high-level dashboard reports.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of August 2017, Rural Development had not provided examples of high-level dashboard reports that clearly identify issues for increased management focus.
    Recommendation: To improve compliance with OMB Circular A-129 standards and strengthen management and oversight of the guarantee program, and to more effectively fulfill the requirements for conducting program reviews described in OMB Circular A-129, the Secretary of Agriculture should direct the Undersecretary for Rural Development to develop procedures for selecting RD credit programs for review based on risk and establish a prioritized schedule for conducting the reviews.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of August 2017, Rural Development said that its Chief Risk Officer was working to establish procedures for selecting Rural Development credit programs for review based on risk, including a prioritized schedule.
    Director: Lawrance L. Evans Jr.,
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To ensure that FHFA has adequate authority to ensure the safety and soundness of the enterprises and to clarify its supervisory role, Congress should consider granting FHFA explicit authority to examine third parties that do business with and play a critical role in the operations of the enterprises.

    Agency: Congress
    Status: Open

    Comments: As of April 2017, Congress has not taken any action on this matter.
    Director: Garcia-diaz, Daniel
    Phone: (202) 512-4529

    2 open recommendations
    including 1 priority recommendation
    Recommendation: To better ensure that taxpayer funds are being used effectively, Congress should consider permanently rescinding any Treasury-deobligated excess MHA balances that Treasury does not move into the Hardest Hit Fund.

    Agency: Congress
    Status: Open

    Comments: Congress has not taken any action since Treasury has not deobligated MHA program funds beyond the $2 billion that it transferred to the TARP-funded Hardest Hit Fund based on the October 2017 TARP Monthly Report to Congress.
    Recommendation: To provide Congress and others with accurate assessments of the funding that has been and will likely be used to help troubled borrowers and to identify any potential obligations not likely to be used, the Secretary of the Treasury should deobligate funds that its review shows will likely not be expended and obligate up to $2 billion of such funds to the TARP-funded Hardest Hit Fund as authorized by the Consolidated Appropriations Act, 2016.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: Treasury agreed with the recommendation and deobligated $2 billion as of February 2016 based on its updated MHA program cost estimates and indicated that it plans to commit this $2 billion to the Hardest Hit Fund program, as GAO recommended. However, Treasury has not deobligated an additional $2.7 billion in potential excess program funds identified by the cost estimate. Treasury has stated that it does not expect to deobligate any estimated excess funds from the MHA program prior to December 2017, when servicers report data on all final transactions. We maintain that Treasury should deobligate additional excess MHA funds that its review showed will likely not be expended and further update its cost estimates as additional information becomes available.
    Director: Lawrance Evans, Jr.
    Phone: (202) 512-8678

    6 open recommendations
    Recommendation: Congress should consider whether additional changes to the financial regulatory structure are needed to reduce or better manage fragmentation and overlap in the oversight of financial institutions and activities to improve (1) the efficiency and effectiveness of oversight; (2) the consistency of consumer and investor protections; and (3) the consistency of financial oversight for similar institutions, products, risks, and services. For example, Congress could consider consolidating the number of federal agencies involved in overseeing the safety and soundness of depository institutions, combining the entities involved in overseeing the securities and derivatives markets, transferring the remaining prudential regulators' consumer protection authorities over large depository institutions to the Consumer Financial Protection Bureau, and the optimal role for the federal government in insurance regulation, among other considerations.

    Agency: Congress
    Status: Open

    Comments: One bill has been introduced in the 115th Congress that would change the financial regulatory structure to address fragmented and overlapping regulatory authorities among agencies, as GAO suggested in February 2016. H.R. 594 was introduced on January 20, 2017, and calls for the functions of the Commodity Futures Trading Commission and the Securities and Exchange Commission to be combined in a single independent regulatory commission. Such an action could help to address fragmentation and overlap between the two agencies, and reduce opportunities for inefficiencies in the regulatory process and inconsistencies in how regulators conduct oversight activities over similar types of institutions, products, and risks.
    Recommendation: Congress should consider whether legislative changes are necessary to align FSOC's authorities with its mission to respond to systemic risks. Congress could do so by making changes to FSOC's mission, its authorities, or both, or to the missions and authorities of one or more of the FSOC member agencies to support a stronger link between the responsibility and capacity to respond to systemic risks. In doing so, Congress could solicit information from FSOC on the effective scope of its collective designation authorities, including any gaps.

    Agency: Congress
    Status: Open

    Comments: No legislative action identified. As of March 1, 2017, no legislation had been introduced that would align FSOC's authorities with its mission to respond to systemic risks, as GAO suggested in February 2016. Without such legislative changes, FSOC may lack the tools it needs to comprehensively address systemic risks that may emerge, and a gap will continue to exist in the post Dodd-Frank Wall Street Reform and Consumer Protection Act mechanisms for the mitigation of systemic risks.
    Recommendation: To help regulators address regulatory fragmentation and improve FSOC's ability to identify emerging systemic risks, as OFR develops and refines its financial stability monitoring tools, it should work with FSOC to determine ways in which to fully and regularly incorporate current and future monitors and assessments into Systemic Risk Committee deliberations, including, where relevant, those that present disaggregated or otherwise confidential supervisory information.

    Agency: Department of the Treasury: Financial Stability Oversight Council: Office of Financial Research
    Status: Open

    Comments: At the FSOC Systemic Risk Committee meeting held in December 2016, Treasury indicated that Office of Financial Research staff presented on the agency's Financial Stability Report. Officials indicated that they provided an assessment on potential financial stability risks, including macroeconomic, market, credit, funding and liquidity, and contagion risks. Systemic Risk Committee meeting attendees were able to compare and contrast these with the results from the Federal Reserve's systemic risk monitoring activities, which were also presented at the meeting. Office of Financial Research officials stated that there was general consensus at the meeting that these discussions were useful and that they should continue. GAO does not believe that this action is consistent with the intent of if February 2016 recommendation to fully and regularly incorporate current and future monitors and assessments into FSOC's Systemic Risk Committee deliberations. While GAO encourages sharing this type of information, the Office of Financial Research's Financial Stability Report is a publicly-available report. The intent of GAO's recommendation was to encourage the agency to fully incorporate all of its monitors into Systemic Risk Committee discussions, including its Financial Stability Monitor--its benchmark tool for assessing risks across the financial system. In addition, in its February 2016 report, GAO encouraged the agency to seek ways in which monitors that present disaggregated or otherwise confidential supervisory information can be incorporated in committee discussions. Without sharing such monitors and information, the Systemic Risk Committee may identify and advance the analysis of only a subset of systemic risks in a timely manner and may identify others too late or miss others altogether. The Financial CHOICE Act of 2016 was introduced in the 114th Congress. The act called for the Office of Financial Research to be eliminated. It was not passed before the end of the 114th Congress.
    Recommendation: To help regulators address regulatory fragmentation and improve FSOC's ability to identify emerging systemic risks, the Federal Reserve should work with FSOC to regularly incorporate the comprehensive results of its systemic risk monitoring activities into Systemic Risk Committee deliberations.

    Agency: Federal Reserve System
    Status: Open

    Comments: As of March 1, 2017, Federal Reserve officials indicated that they provided a presentation to FSOC's Systemic Risk Committee in December 2016, which included comprehensive results from its systemic risk monitoring activities. This action appears to be consistent with GAO's February 2016 recommendation, but the documentation provided by the Federal Reserve did not provide sufficient evidence that the agency has regularly incorporated these results into Systemic Risk Committee meetings. GAO will continue to monitor the Federal Reserve's participation in Systemic Risk Committee meetings to ensure that the agency continues to provide both regular and comprehensive results to the committee. Without better access to systemic risk monitoring tools and other outputs, the Systemic Risk Committee may identify and advance the analysis of only a subset of systemic risks in a timely manner and may identify others too late or miss others altogether.
    Recommendation: To more efficiently and effectively monitor the financial system for systemic risks and reduce the risk of unnecessary duplication, OFR and the Federal Reserve should jointly articulate individual and common goals for their systemic risk monitoring activities, including a plan to monitor progress toward articulated goals, and formalize regular strategic and technical discussions around their activities and outputs to support those goals.

    Agency: Department of the Treasury: Financial Stability Oversight Council: Office of Financial Research
    Status: Open

    Comments: As of March 1, 2017, the Federal Reserve and the Office of Financial Research had coordinated to organize semi-annual meetings to jointly discuss views from their respective monitoring of the financial system for risks; but these meetings had not yet taken place. The first of these meetings is to be held in May 2017 following the agencies' respective systemic risk exercises. Initiating these discussions addresses part of GAO's February 2016 recommendation. GAO plans to review documentation from these meetings in 2017 to further assess if the agencies will use these meetings to jointly articulate individual and common goals, including developing a plan to monitor progress toward the goals. Fully addressing GAO's recommendation could help to ensure comprehensiveness in systemic risk surveillance and reduced risk of duplication. On September 9, 2016, the Financial CHOICE Act of 2016 was introduced. It called for the Office of Financial Research to be eliminated. The legislation did not pass before the 114th Congress ended.
    Recommendation: To more efficiently and effectively monitor the financial system for systemic risks and reduce the risk of unnecessary duplication, OFR and the Federal Reserve should jointly articulate individual and common goals for their systemic risk monitoring activities, including a plan to monitor progress toward articulated goals, and formalize regular strategic and technical discussions around their activities and outputs to support those goals.

    Agency: Federal Reserve System
    Status: Open

    Comments: As of March 1, 2017, the Federal Reserve and the Office of Financial Research had coordinated to organize semi-annual meetings to jointly discuss views from their respective monitoring of the financial system for risks; but these meetings had not yet taken place. The first of these meetings is to be held in May 2017 following the agencies' respective systemic risk exercises. Initiating these discussions addresses part of GAO's February 2016 recommendation. GAO plans to review documentation from these meetings in 2017 to further assess if the agencies will use these meetings to jointly articulate individual and common goals, including developing a plan to monitor progress toward the goals. Fully addressing GAO's recommendation could help to ensure comprehensiveness in systemic risk surveillance and reduced risk of duplication. On September 9, 2016, the Financial CHOICE Act of 2016 was introduced. It called for the Office of Financial Research to be eliminated. The legislation did not pass before the 114th Congress ended.
    Director: James R. McTigue, Jr.
    Phone: (202) 512-9110

    2 open recommendations
    Recommendation: To improve taxpayer service amid declining budgets and increased responsibilities, Congress should consider requiring the Secretary of the Treasury to develop a comprehensive customer service strategy in consultation with the Commissioner of Internal Revenue that (1) determines appropriate telephone and correspondence levels of service, based on service provided by the best in business and customer expectations; and (2) thoroughly assesses which services IRS can shift to self-service options.

    Agency: Congress
    Status: Open

    Comments: As of March 2017, no legislative action had been taken.
    Recommendation: To improve performance management of taxpayer services, the Secretary of the Treasury should update the Department's performance plan to include overage rates for handling taxpayer correspondence as a part of Treasury's performance goals.

    Agency: Department of the Treasury
    Status: Open

    Comments: In May 2017, Treasury officials told us that they plan to include correspondence data as part of Treasury's fiscal year 2018 annual performance plan and fiscal year 2016 annual performance report. They expect it to be available online before Summer 2017.
    Director: Alicia Puente Cackley
    Phone: (202) 512-8678

    2 open recommendations
    Recommendation: To help ensure that adequate data collection efforts by state insurance regulators produce sufficient, reliable data to oversee the LPI market, NAIC should work with the state insurance regulators to develop and implement more robust policies and procedures for the collection of annual data from LPI insurers to ensure they are complete and reliable.

    Agency: National Association of Insurance Commissioners
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help ensure that adequate data collection efforts by state insurance regulators produce sufficient, reliable data to oversee the LPI market, NAIC should work with the state insurance regulators to complete efforts to obtain more detailed national data from LPI insurers.

    Agency: National Association of Insurance Commissioners
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Lawrance Evans
    Phone: (202) 512-8678

    4 open recommendations
    Recommendation: To ensure that NCUA has adequate authority to determine the safety and soundness of credit unions, Congress should consider modifying the Federal Credit Union Act to grant NCUA authority to examine technology service providers of credit unions.

    Agency: Congress
    Status: Open

    Comments: In July 2015, we suggested that Congress modify the Federal Credit Union Act to grant NCUA authority to examine technology service providers of credit unions. As of October 2016, Congress had not granted NCUA such authority.
    Recommendation: To improve their ability to assess the adequacy of the information security practices at medium and small institutions, the heads of Federal Deposit Insurance Corporation, the Federal Reserve, Office of the Comptroller of the Currency, and NCUA should routinely categorize IT examination findings and analyze this information to identify trends that can guide areas of review across institutions.

    Agency: Department of the Treasury: Office of the Comptroller of the Currency
    Status: Open

    Comments: In July 2015, we recommended that the Office of the Comptroller of the Currency (OCC) and other federal financial institution regulators conduct trend analysis of their IT examination findings to improve their ability to assess the adequacy of information security practices at medium and small institutions. In September 2015, OCC stated that it is taking two actions to respond to our recommendation. First, the agency is integrating the Cybersecurity Assessment Tool (Tool), developed by OCC and other federal financial institution regulators, into OCC's ongoing IT examinations of national banks and federal savings associations. Officials believe that the Tool will provide OCC with a repeatable and measurable process for assessing both the level of risk and the maturity of risk management processes within and across OCC-supervised institutions. Also, officials believe that data gathered in this process will allow OCC to monitor industry trends and identify new or emerging weaknesses where additional guidance or supervisory actions may be needed. Furthermore, the Tool will help OCC allocate examiner resources and better target examiner training. OCC began integrating the Tool in selected examinations in December 2015. Second, OCC stated that it enhanced its guidance and procedures for examiners to identify and aggregate supervisory concerns into matters requiring attention (MRAs), which are the mechanism OCC uses to communicate supervisory concerns to bank management and directors. OCC believes that the enhancements will facilitate systemic categorization of supervisory concerns that strengthen recording, monitoring, and analyzing of volumes and trends across bank portfolios. Also, the enhanced guidance discusses the relationship between MRAs, interagency ratings, OCC's risk assessment system, and enforcement actions. OCC believes that these process enhancements combined with the integration of the Tool, will improve its ability to assess information security practices at medium and small institutions. We will continue to monitor OCC's progress in implementing the Tool and the resulting trend analyses that the Tool is intended to facilitate.
    Recommendation: To improve their ability to assess the adequacy of the information security practices at medium and small institutions, the heads of Federal Deposit Insurance Corporation, the Federal Reserve, Office of the Comptroller of the Currency, and NCUA should routinely categorize IT examination findings and analyze this information to identify trends that can guide areas of review across institutions.

    Agency: Federal Reserve System
    Status: Open

    Comments: In July 2015, we recommended that the Board of Governors of the Federal Reserve System (Board) and other federal financial institution regulators conduct trend analysis of their IT examination findings to improve their ability to assess the adequacy of information security practices at medium and small institutions. As of October 2016, the Board had not provided an update on its efforts to address this recommendation.
    Recommendation: To improve their ability to assess the adequacy of the information security practices at medium and small institutions, the heads of Federal Deposit Insurance Corporation, the Federal Reserve, Office of the Comptroller of the Currency, and NCUA should routinely categorize IT examination findings and analyze this information to identify trends that can guide areas of review across institutions.

    Agency: National Credit Union Administration
    Status: Open

    Comments: In July 2015, we recommended that the National Credit Union Administration (NCUA) and other federal financial institution regulators conduct trend analysis of their IT examination findings to improve their ability to assess the adequacy of information security practices at medium and small institutions. In July 2016, NCUA told us that it and the other federal financial institution regulators issued the Cybersecurity Assessment Tool (Tool) in June 2015 to provide a comprehensive method for institutions to benchmark their cybersecurity programs. Officials believe that the Tool will allow examiners to consistently and methodically look at credit union risks and trends, as well as collect detailed information on the risks and mitigating controls employed by credit unions. When the Tool is fully implemented, officials expect to be able to aggregate risk indicators and program gaps across the credit union industry to improve resource deployment and enhance cybersecurity supervisory oversight. NCUA plans to begin pilot testing the Tool in late 2016 with program integration targeted for July 2017. We will continue to monitor NCUA's progress with this program and revisit our recommendation in July 2017.
    Director: Lawrance Evans
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To enhance and sustain future U.S. participation in the development of international capital standards for insurers, the Secretary of the Treasury should direct the Director of FIO, in consultation with the Federal Reserve and NAIC, to enhance future collaborative interagency efforts by following additional leading practices for collaboration, such as taking steps to sustain leadership over the long term and publicly reporting on their efforts, for example in annual reports.

    Agency: Department of the Treasury
    Status: Open

    Comments: Although Treasury publicly reported on collaboration efforts between the Federal Insurance Office, the Board of Governors of the Federal Reserve System, and state insurance regulators in its most recent annual report, it has not taken other steps to ensure that leadership will be sustained over the long term.
    Director: Mathew J. Scirè
    Phone: (202) 512-8678

    7 open recommendations
    Recommendation: To enhance the effectiveness of its preparations for conducting a retrospective review of its QM regulations, HUD should develop a plan that identifies the metrics, baselines, and analytical methods to be used. Furthermore, to account for and help mitigate the limitations of existing data and the uncertain availability of enhanced datasets, HUD should include in its plan alternate metrics, baselines, and analytical methods that could be used data were to remain unavailable.

    Agency: Department of Housing and Urban Development
    Status: Open

    Comments: In February 2017, HUD noted that it does not currently collect data on the annual percentage rate (APR) for each loan that would allow for a perfect comparison to the average prime offer rate. According to HUD, its Office of Housing has on its long-term list of systems priorities to collect specific information from the Uniform Closing Data that could be used to conduct such a comparison. However, HUD stated that it has not received adequate funding to meet these systems enhancements. According to HUD, it is considering the feasibility and potential utility of alternative data sources or the use of a proxy in an appropriate methodology. For instance, whether it may be possible to approximate the APR based upon the note rate and information on closing costs that is collected in the current data system, or alternatively, whether the APR could be obtained or approximated through matching Home Mortgage Disclosure Act data for FHA loans.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: In January 2017, FHFA informed GAO that SEC had shared its draft plan with the other participating agencies and there was an interagency call to discuss the plan on December 20, 2016. FHFA confirmed that there was an interagency call on that date to discuss the qualified residential mortgage (QRM) review. FHFA noted that it was developing its own plan, and anticipated that the plan would be completed by June 30, 2017. Depending on changes in the structure of the mortgage market, FHFA stated that it will further update the plan as the agency approaches the start of the official QRM definition review in 2019. As with the 2014 final rule, FHFA staff expected that FHFA's participation will focus on the analysis of Fannie Mae and Freddie Mac residential mortgage data.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Department of Housing and Urban Development
    Status: Open

    Comments: In February 2017, HUD stated that it has engaged in preliminary discussions both internally and with the other five partner agencies to the 2014 QRM Joint Regulation: OCC, the Federal Reserve Board, FDIC, FHFA and SEC. Based on GAO's recommendations, HUD stated that it has also conducted initial reviews of existing and potential methodologies and data sources that may inform the review. HUD also noted that as a fundamental matter, FHA insured mortgages are only securitized through the Government National Mortgage Association (GNMA). Both FHA and GNMA have extensive underlying requirements regarding both mortgage terms and conditions as well as requirements related to the securitization of those mortgages. According to HUD, its retrospective review of the qualified residential mortgage (QRM) rule, in terms of any impact on FHA single family insurance programs, will take into account the existing underlying FHA and GNMA statutes and regulations that already govern those programs.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Department of the Treasury: Office of the Comptroller of the Currency
    Status: Open

    Comments: In its comment letter on the draft report, OCC indicated that it planned to take GAO's recommendation into account as it monitored mortgage market conditions and prepared for upcoming qualified residential mortgage (QRM) reviews. OCC stated that it planned to periodically meet with the other agencies to discuss the implications of any trends it observes and coordinate on studies to better focus and support its evaluation of the review factors.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Federal Deposit Insurance Corporation
    Status: Open

    Comments: In February 2017, FDIC indicated that it developed a plan that outlines the baseline, data, metrics, and analytical methods that it plans to utilize in the qualified residential mortgage (QRM) definition review. According to FDIC, the plan also outlines FDIC's commitment to working collaboratively with the other agencies. As a baseline, FDIC plans to use the data, metrics, and analytical methods used in the final rulemaking process as outlined in the Supplementary Information to the credit risk retention (CRR) regulation as well as data and analytical methods that the FDIC currently uses to monitor the mortgage and securitization markets and economy on an ongoing basis. FDIC stated that it continues to plan to coordinate with the other agencies on the QRM definition review by allocating responsibilities based on expertise, data, and other resources within each agency as the agencies did in the CRR rulemaking process.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: In January 2017, the Federal Reserve Board stated that it has an ongoing program to monitor the mortgage and securitization markets as part of its monetary policy, regulatory, and financial stability responsibilities. According to the Federal Reserve, Board staff are continuously researching new data sources, analytical methods, and metrics as part of that program. The Federal Reserve also noted that Board staff with responsibility for implementing this recommendation continue to meet with their counterparts at other agencies.
    Recommendation: To enhance the effectiveness of their preparations for conducting a retrospective review of the QRM regulations, the agencies responsible for the QRM regulations--Federal Deposit Insurance Corporation, Federal Housing Finance Agency, Board of Governors of the Federal Reserve System, HUD, Office of the Comptroller of the Currency, and Securities and Exchange Commission--should develop a plan that identifies the metrics, baselines, and analytical methods to be used and specify the roles and responsibilities of each agency in the review process. Furthermore, to account for and help mitigate limitations of existing data and the uncertain availability of enhanced datasets, the six agencies should include in their plan alternate metrics, baselines, and analytical methods that could be used if data were to remain unavailable.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In January 2017, SEC staff stated that they had developed a preliminary review plan for the qualified residential mortgage (QRM) rule in December 2016. SEC staff noted that although the review plan describes several proposed analytical approaches, the precise analytical approach to review the mortgage market conditions and the definition of QRM will depend on future data availability, future mortgage market conditions, and the role of Fannie Mae, Freddie Mac, and other participants in those markets at that time. To prepare for this review, SEC staff noted that they intend to meet on a periodic basis with the staff of the other agencies to share the results of the analyses discussed above, understand the analyses being performed by the other agencies, and discuss what additional data or analyses may be helpful. As part of these discussions, SEC staff stated that the agencies will likely divide responsibilities for conducting the review according to agency expertise and resources, consistent with each agency's statutory authority and role.
    Director: A. Nicole Clowers
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To improve SEC's FINRA oversight program, the SEC Chair should direct the appropriate offices and divisions to incorporate additional risk-management practices by taking several actions, including: (1) establishing specific performance goals for the program and performance measures and related targets to assess Market Oversight's progress in meeting those goals; (2) formalizing documentation of procedures, including procedures for making changes to the annual planned oversight activities and decision-making rationales; and (3) modifying existing risk-assessment procedures to require an assessment of internal risks to successfully meeting the FINRA oversight program's goals and objectives.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: On August 26, 2016, SEC staff said that they had put together proposals to address the recommendation shortly after the report was issued and was awaiting management approval. However, in the meantime, SEC reorganized its examination staff and created a dedicated FINRA oversight group. The reorganization was expected to be complete by October 2016. SEC staff planned to incorporate, for management's approval, the elements in the proposals into the new policies and procedures for the FINRA oversight group. Subsequently, on February 13, 2017, SEC staff said that SEC now has new management in place that are learning about the risk management framework, and are assessing how best to incorporate GAO's recommendations into the framework.
    Director: Dalkin, James R
    Phone: (202) 512-3133

    1 open recommendations
    Recommendation: The U.S. Securities and Exchange Commission should direct the COO and CFO to implement controls, such as periodic reviews of asset dispositions, to help reasonably assure that SEC's procedures for the preparation and maintenance of documentation related to the disposition of assets are consistently implemented and that any deviations from established procedures are documented.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: SEC Officials are still working on corrective actions as of the end of fiscal year 2016. We will follow up on this recommendation during our fiscal year 2017 SEC financial statement audit.
    Director: Lawrance L. Evans, Jr.
    Phone: (202) 512-8678

    5 open recommendations
    Recommendation: To improve FSOC's control activities and help ensure that it better manages its determination process and achieves intended results, the Secretary of the Treasury, in his capacity as the Chairperson of FSOC and in consultation with FSOC members, should systematically record the staff contributing to determination evaluations, and monitor such information to help assess the progress and efficiency of determination evaluations..

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open

    Comments: FSOC has created a document to track agencies participating in evaluations and has said that it will record and monitor information as new companies are evaluated. Although FSOC has created a template to record agency participation, FSOC still needs to collect and monitor such information including information on the agency staff participating in determination evaluations.
    Recommendation: To enhance disclosure and strengthen transparency, the Secretary of the Treasury, in consultation with FSOC members, for future determinations, to the maximum extent possible, should include additional details in its public basis documentation about why FSOC determined that the company met one or both of the statutory determination standards. Specifically, in addition to identifying that the size, significance, or other attributes of the company's characteristics could pose a threat to U.S. financial stability, FSOC should explain--without revealing sensitive information--how it concluded that the characteristics were sufficiently large or significant enough, or had other attributes, to meet one or both of the statutory determination standards.

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open

    Comments: FSOC stated that it intends to include more detail in its public basis document while meeting its legal obligations to protect confidential information. In February 2015, FSOC issued supplemental procedures for nonbank financial company designations that stated its commitment to continuing to set forth sufficient information in its public bases to provide the public with an understanding of the Council's analysis while protecting sensitive, confidential information submitted by the company to the Council. FSOC's public basis document for its most recent designation, issued on December 18, 2014, included additional information compared to prior basis documents. However, the recent basis document did not fully explain how FSOC concluded that the company's characteristics were sufficiently large or significant enough, or had other attributes, to meet a determination standard.
    Recommendation: To help ensure that FSOC is comprehensively identifying and considering companies, the Secretary of the Treasury in consultation with FSOC members, should establish procedures to evaluate companies in Stage 2 and Stage 3 under both statutory determination standards when an evaluation in either stage concludes that a company does not meet one of the standards, or document--on a company-specific or more general basis--why the second determination standard is not relevant for determination evaluations.

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open

    Comments: FSOC conducted a review of its nonbank designation procedures, including consideration of this recommendation, which resulted in issuance of supplemental procedures in February 2015. FSOC stated that it has not adopted formal changes to implement this recommendation but noted that the Council will continue to work to identify and evaluate potential changes to its practices and procedures and will revisit this recommendation in mid-2016.
    Recommendation: To help ensure that FSOC is comprehensively identifying and considering companies, the Secretary of the Treasury in consultation with FSOC members, should develop a process to collect information necessary for Stage 1 analysis, as appropriate, from certain nonbank financial companies for which public or regulatory information is otherwise unavailable. For example, FSOC could have companies for which such information is unavailable and that meet certain characteristics (such as quantitative thresholds similar to those used in Stage 1) report necessary information to the Office of Financial Research.

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open

    Comments: FSOC staff are currently reviewing potential ways to supplement the existing public and regulatory information available to identify companies for evaluation in Stage 1. FSOC stated that it will revisit this recommendation in mid-2016.
    Recommendation: To improve FSOC's control activities and help ensure that it better manages its determination process and achieves intended results, the Secretary of the Treasury, in his capacity as the Chairperson of FSOC and in consultation with FSOC members, should systematically record the dates of key process steps.

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open

    Comments: FSOC has created a document to centrally track key dates in each evaluation and has said that it will record and monitor the information as new companies are evaluated. However, FSOC has not yet recorded these dates in the document that it has created for this purpose.
    Director: Mathew Scirè
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To improve monitoring and oversight of Treasury's HAMP, the Secretary of the Treasury should conduct periodic evaluations using analytical methods, such as econometric modeling as appropriate, to help explain differences among MHA servicers in redefault rates that may inform its compliance reviews of individual servicers, identify areas of weaknesses and best practices, and determine the potential need for additional program policy changes.

    Agency: Department of the Treasury
    Status: Open

    Comments: As of the Second Quarter 2017, Treasury continues to monitor and report on the performance of Home Affordable Modification Program (HAMP) permanent loan modifications on a cohort basis (year loan was modified) and by other drivers of performance (payment reduction, credit score and delinquency status at time of modification, etc.). Additionally, Treasury officials stated that they monitor default rates by servicer on a monthly basis. However, they stated that they have not performed econometric analyses of redefault rates by individual servicer. By not capitalizing on the information these methods provide, Treasury may miss opportunities to identify individual servicer best practices that retain the greatest number of eligible borrowers.
    Director: Lawrance L. Evans, Jr.
    Phone: (202) 512-8678

    1 open recommendations
    Recommendation: To help ensure that foreclosure prevention principles are being incorporated into servicers' practices, the Chairman of the Board of Governors of the Federal Reserve System should ensure that the planned activities to oversee the foreclosure prevention principles include evaluation and testing of servicers' implementation of the principles.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: In October 2016, Federal Reserve staff indicated that examiners are continuing to review servicers' efforts to incorporate the foreclosure prevention principles into their practices. Our assessment of the extent to which those reviews include evaluation and testing of servicers' implementation of the principles is pending additional discussions with the Federal Reserve.
    Director: Clowers, Angela N
    Phone: (202) 512-8678

    2 open recommendations
    Recommendation: To help ensure that OMB, in consultation with federal financial regulators, consistently classifies Dodd-Frank rules as major under CRA, the Director of OMB, through the Administrator of the Office of Information and Regulatory Affairs, should issue additional guidance to help standardize processes for identifying major rules under CRA, including on the extent to which agencies should submit rules to OMB for review, such as whether agencies should submit only those rules their analyses indicate are major or all rules.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open

    Comments: OMB originally disagreed with the recommendation and has not taken any action to implement the recommendation as of June 2017.
    Recommendation: To help ensure that OMB, in consultation with federal financial regulators, consistently classifies Dodd-Frank rules as major under CRA, the Director of OMB, through the Administrator of the Office of Information and Regulatory Affairs, should issue additional guidance to help standardize processes for identifying major rules under CRA, including on how agencies should apply CRA's major rule criteria in their analyses, such as whether agencies should include indirect benefits or costs, combine benefits or costs of separate but related rules, or aggregate benefits or costs for jointly issued rules.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open

    Comments: OMB originally disagreed with the recommendation and has not taken any action to implement the recommendation as of June 2017.
    Director: Clowers, Angela N
    Phone: (202) 512-8678

    4 open recommendations
    Recommendation: To help SEC address identified personnel management challenges, and to enhance SEC's ability to strategically hire and retain the appropriate number of staff with the requisite skill sets for today and in the future, the Chairman of SEC should direct the Office of the Chief Operating Officer (COO) and Office of Human Resources (OHR) to prioritize efforts to expeditiously develop a comprehensive workforce plan, including a succession plan, and establish time frames for implementation and mechanisms to help ensure that the plans are regularly updated.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: While SEC plans to conduct a competency assessment for the remaining occupations not included in its July 2016 workforce plan, until the assessment and resulting workforce plan for fiscal year 2019+ is completed and we have reviewed it, this recommendation remains open. However, a comprehensive assessment of occupations should always be part of the workforce planning cycle to identify the resources needed to meet mission requirements. SEC should be doing a yearly review of needs to include attrition modeling, budget costs, and staffing (i.e., staff distribution across all locations, promotion needs, hiring requirements for all areas (mission and mission support)).
    Recommendation: To help SEC address identified personnel management challenges, and to enhance SEC's ability to strategically hire and retain the appropriate number of staff with the requisite skill sets for today and in the future, the Chairman of SEC should direct the Office of the COO and OHR to incorporate OPM guidance as it develops its workforce and succession plans, by developing a formal action plan to identify and close competency gaps, and fill supervisory positions; and institute a fair and transparent process for identifying high-potential leaders from within the agency.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: While SEC plans to conduct a succession needs survey that will be used as part of its holistic gap analysis and used to inform the next workforce plan for fiscal year 2019+, until the needs survey and resulting workforce plan is completed and we have reviewed it, this recommendation remains open. However, as part of succession planning, division managers should already know, or should have been provided, retirement eligibility information, attrition estimates, and knowledge of their staff skill sets. They need this information for succession planning purposes to determine if they need to hire, or use promotions as a way to fill potential staff losses.
    Recommendation: To help SEC address identified personnel management challenges, and to help enhance the credibility of its performance management system, the Chairman of SEC should direct the COO and OHR to conduct periodic validations (with staff input) of the performance management system and make changes, as appropriate, based on these validations.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: SEC has yet to conduct a validation of its performance management system for its entire staff. In fiscal year (FY) 2016, SEC introduced a new pilot performance management program and engaged OPM to assess the effectiveness of it, but this new program was only initiated with non-bargaining staff. This assessment included OPM facilitated focus groups and an OPM survey soliciting anonymous participant feedback. According to SEC, stakeholders were engaged in the development and implementation phases of the pilot program. Additionally, OPM hosted a training session at the midpoint of the FY 2016 pilot for supervisors to help them communicate performance expectations and feedback. In 2017, SEC expanded the pilot performance management program to bargaining unit staff. SEC has briefed the National Treasury Employees Union (NTEU) prior to each phase in the performance management process and incorporated feedback into the program. The Office of Human Resources (OHR) has provided program-specific training to both employees and supervisors for each phase of the performance cycle and has collaborated with NTEU on all messaging to employees. SEC is now working with OPM to determine the best approach to assess the effectiveness of the FY 2017 pilot. According to SEC, subsequent to OPM's assessment of the FY 2017 pilot, SEC will work with NTEU to determine how to proceed with the program. OHR has also agreed in advance to share the FY 2017 performance rating data with NTEU so they may use it in their own assessment of the 2017 pilot.
    Recommendation: To help SEC address identified personnel management challenges, and to build on SEC's efforts to enhance intra-agency communication and collaboration, the Chairman should direct the COO to explore communication and collaboration best practices and implement those that could benefit SEC.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: As of November 2017, SEC had not demonstrated the use of best practices to improve communication and collaboration within and across SEC divisions and offices. In June 2017, SEC commenced the new Operations Steering Committee, which consists of the Acting Chief Operating Officer (COO) as the Chair, and the Managing Executives of the mission critical divisions and Office of Compliance Inspections and Examinations (OCIE). This group meets on a monthly basis. During the September 2017 meeting, the Acting COO presented two proposed approaches, based on best practices, to address GAO's findings to improve communication and collaboration: 1. Emphasize communication and collaboration, and associated initiatives, within the new Strategic Plan. 2. Work with the Labor Management Forum - NTEU. Until we see how SEC operationalizes these proposed approaches, this recommendation remains open.
    Director: Clowers, Angela N
    Phone: (202) 512-8678

    4 open recommendations
    including 1 priority recommendation
    Recommendation: FSOC and OFR should clarify responsibility for implementing requirements to monitor threats to financial stability across FSOC and OFR, including FSOC members and member agencies, to better ensure that the monitoring and analysis of the financial system are comprehensive and not unnecessarily duplicative.

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open
    Priority recommendation

    Comments: As of October 2016, FSOC staff have said FSOC and its members, including OFR, understand their responsibilities, saying that meetings of FSOC's Systemic Risk Committee help to ensure that FSOC member agencies have clarity on their responsibilities and noted that the committee operated under a charter. However, our review of the charter found that it does not clarify responsibilities for monitoring threats to financial stability. They also stated that actions OFR and the Federal Reserve (both of which serve on the Systemic Risk Committee) agreed to take in response to a recommendation in a GAO report issued in February 2016 would help to clarify these responsibilities. However, these represent just two of FSOC's member agencies; similar collaborative steps by other agencies would support the clarity of roles for monitoring threats to financial stability. We maintain that more specific action from FSOC and OFR, including FSOC member and member agencies, is needed to address this recommendation that ensures clarity of roles and responsibilities in proactively and comprehensively monitoring for potential emerging threats in the financial system. Our past work has shown that the lack of clear roles and coordination can lead to duplication, confusion, and regulatory gaps.
    Recommendation: FSOC and OFR should clarify responsibility for implementing requirements to monitor threats to financial stability across FSOC and OFR, including FSOC members and member agencies, to better ensure that the monitoring and analysis of the financial system are comprehensive and not unnecessarily duplicative.

    Agency: Department of the Treasury: Financial Stability Oversight Council: Office of Financial Research
    Status: Open

    Comments: As of March 2017, OFR has taken some steps to work with the Board of Governors of the Federal Reserve System, a member agency of FSOC, to organize semi-annual meetings to jointly discuss views from their respective monitoring of the financial system for risks. We continue to monitor FSOC and OFR actions that would be responsive to clarifying responsibilities for monitoring threats to financial stability across all the agencies that are members of FSOC.
    Recommendation: To strengthen accountability and collaboration in FSOC's decision making, FSOC should establish a collaborative and comprehensive framework for assessing the impact of its decisions for designating FMUs and nonbank financial companies on the wider economy and those entities. This framework should include assessing the effects of subjecting designated FMUs and nonbank financial companies to new regulatory standards, requirements, and restrictions; establishing a baseline from which to measure the effects; and documenting the approach.

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open

    Comments: In response to an April 2017 presidential memorandum, Treasury is conducting a review of FSOC's designation process, including an assessment of the effects of designating FMUs and nonbank financial companies. This review will result in a report. We will update the status of this recommendation after we have reviewed the report.
    Recommendation: To strengthen accountability and collaboration in FSOC's decision making, FSOC should develop more systematic forward-looking approaches for reporting on potential emerging threats to financial stability in annual reports. Such an approach should provide methodological insight into why certain threats to financial stability are included or excluded over time, separate current or past threats from those that are potentially emerging, and prioritize the latter.

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open

    Comments: When FSOC publishes its annual report for 2017 and we have reviewed it, we will provide updated information.
    Director: Clowers, Angela N
    Phone: (202) 512-8678

    2 open recommendations
    Recommendation: As SEC works to enhance its oversight of FINRA, the SEC Chairman should encourage FINRA to conduct retrospective reviews of its rules and establish a process for examining FINRA's reviews.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: As SEC works to enhance its oversight of FINRA, the SEC Chairman should direct Office of Compliance Inspections and Examinations (OCIE) to follow all elements of a risk-management framework as it develops plans for an enhanced risk-based approach to FINRA oversight, such as developing plans for how it will prioritize risks related to oversight of FINRA and assessing the effectiveness of its risk-based model.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Clowers, Angela N
    Phone: (202)512-3000

    11 open recommendations
    Recommendation: In order to improve the efficiency and effectiveness of their efforts, the federal financial regulators have begun to take steps to address challenges associated with promulgating hundreds of new rules required under the Dodd-Frank Act. To strengthen the rigor and transparency of their regulatory analyses, the federal financial regulators should take steps to better ensure that the specific practices in OMB's regulatory analysis guidance are more fully incorporated into their rulemaking policies and consistently applied.

    Agency: National Credit Union Administration
    Status: Open

    Comments: In June 2016, NCUA told us that it is nearing completion of agency internal policies that standardize and institutionalize the rulemaking process within NCUA. According to agency officials, these policies will document NCUA's current practice related to OMB's regulatory analysis guidance. The policies will be issued to appropriate staff by the end of 2016. At that time, we will review the policies to review the extent to which they incorporate the practices in OMB's regulatory analysis guidance.
    Recommendation: In order to improve the efficiency and effectiveness of their efforts, the federal financial regulators have begun to take steps to address challenges associated with promulgating hundreds of new rules required under the Dodd-Frank Act. To maximize the usefulness of the required retrospective reviews, the federal financial regulatory agencies should develop plans that determine how they will measure the impact of Dodd-Frank Act regulations--for example, determining how and when to collect, analyze, and report needed data.

    Agency: National Credit Union Administration
    Status: Open

    Comments: In June 2016, NCUA noted that all of the agency's regulations are reviewed at least every three years, during an established rotation, so that every year one-third of the agency's regulations are open to comment from the public. NCUA reported that it recently launched a comprehensive multi-year project to update the agency's main data collection and analytic systems. Agency officials stated that the updates will ensure that the agency collects the data needed to assess the effectiveness and impact of applicable regulations. We will continue to monitor NCUA's progress in updating its information systems for purposes of retrospective reviews.
    Recommendation: In order to improve the efficiency and effectiveness of their efforts, the federal financial regulators have begun to take steps to address challenges associated with promulgating hundreds of new rules required under the Dodd-Frank Act. To maximize the usefulness of the required retrospective reviews, the federal financial regulatory agencies should develop plans that determine how they will measure the impact of Dodd-Frank Act regulations--for example, determining how and when to collect, analyze, and report needed data.

    Agency: Department of the Treasury: Office of the Comptroller of the Currency
    Status: Open

    Comments: In March 2017, the federal banking regulators sent Congress their report of the second Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). Under EGRPRA, the regulators must jointly conduct a review of their regulations every 10 years and consider whether any of the regulations are outdated, unnecessary, or unduly burdensome. The regulators included within their review's scope some regulations issued pursuant to the Dodd-Frank Act. To carry out the EGRPRA review, the regulators generally solicited public comments on their covered regulations through Federal Register notices and public outreach meetings. Although the regulators addressed some of the issues raised by EGRPRA commenters to reduce regulatory burden, they generally focused on identifying regulatory burdens, as required by the law, and not on measuring the impact of the Dodd-Frank Act regulations to assess the extent to which they are achieving their intended purposes. For this reason, our recommendation remains open.
    Recommendation: In order to improve the efficiency and effectiveness of their efforts, the federal financial regulators have begun to take steps to address challenges associated with promulgating hundreds of new rules required under the Dodd-Frank Act. To strengthen the rigor and transparency of their regulatory analyses, the federal financial regulators should take steps to better ensure that the specific practices in OMB's regulatory analysis guidance are more fully incorporated into their rulemaking policies and consistently applied.

    Agency: Federal Reserve System
    Status: Open

    Comments: We sought information from the Board of Governors of the Federal Reserve System in May 2016 regarding the status of the recommendation, but did not receive any new information. Therefore, the recommendation remains open.
    Recommendation: In order to improve the efficiency and effectiveness of their efforts, the federal financial regulators have begun to take steps to address challenges associated with promulgating hundreds of new rules required under the Dodd-Frank Act. To maximize the usefulness of the required retrospective reviews, the federal financial regulatory agencies should develop plans that determine how they will measure the impact of Dodd-Frank Act regulations--for example, determining how and when to collect, analyze, and report needed data.

    Agency: Federal Reserve System
    Status: Open

    Comments: In March 2017, the federal banking regulators sent Congress their report of the second Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). Under EGRPRA, the regulators must jointly conduct a review of their regulations every 10 years and consider whether any of the regulations are outdated, unnecessary, or unduly burdensome. The regulators included within their review's scope some regulations issued pursuant to the Dodd-Frank Act. To carry out the EGRPRA review, the regulators generally solicited public comments on their covered regulations through Federal Register notices and public outreach meetings. Although the regulators addressed some of the issues raised by EGRPRA commenters to reduce regulatory burden, they generally focused on identifying regulatory burdens, as required by the law, and not on measuring the impact of the Dodd-Frank Act regulations to assess the extent to which they are achieving their intended purposes. For this reason, our recommendation remains open.
    Recommendation: To enhance interagency coordination on regulations issued pursuant to the Dodd-Frank Act, the FSOC should work with the federal financial regulatory agencies to establish formal coordination policies that clarify issues such as when coordination should occur, the process that will be used to solicit and address comments, and what role FSOC should play in facilitating coordination.

    Agency: Department of the Treasury: Financial Stability Oversight Council
    Status: Open

    Comments: In May 2015, FSOC created the Regulations and Resolutions Committee to identify potential gaps in regulation that could pose risks to the U.S. financial stability. The committee's duties include serving as a forum for information sharing and coordination among the FSOC staff, member agencies and other federal and state agencies, as appropriate, regarding domestic financial services policy development, and consulting, as appropriate, on the development of regulations to implement the Dodd-Frank Act's orderly liquidation authority. While the committee's duties should help promote greater collaboration, they do not constitute a formal rulemaking coordination policy addressing, for example, when coordination should occur, processes for soliciting and addressing comments, and FSOC role in facilitating coordination among and between the financial regulators. In its 2010 comment letter, FSOC noted that it provides a forum for interagency collaboration and consultation, in part through its committees, and has not indicated any plans to develop a formal rulemaking coordination policy as we recommended, in part because of its need to preserve the independence of the regulators. Therefore, the recommendation remains open.
    Recommendation: To enhance interagency coordination on regulations issued pursuant to the Dodd-Frank Act, the FSOC should work with the federal financial regulatory agencies to establish formal coordination policies that clarify issues such as when coordination should occur, the process that will be used to solicit and address comments, and what role FSOC should play in facilitating coordination.

    Agency: Federal Reserve System
    Status: Open

    Comments: In May 2015, FSOC created the Regulations and Resolutions Committee to identify potential gaps in regulation that could pose risks to the U.S. financial stability. The committee's duties include serving as a forum for information sharing and coordination among the FSOC staff, member agencies and other federal and state agencies, as appropriate, regarding domestic financial services policy development, and consulting, as appropriate, on the development of regulations to implement the Dodd-Frank Act's orderly liquidation authority. While the committee's duties should help promote greater collaboration, they do not constitute a formal rulemaking coordination policy addressing, for example, when coordination should occur, processes for soliciting and addressing comments, and FSOC role in facilitating coordination among and between the financial regulators. In its 2010 comment letter, FSOC noted that it provides a forum for interagency collaboration and consultation, in part through its committees, and has not indicated any plans to develop a formal rulemaking coordination policy as we recommended, in part because of its need to preserve the independence of the regulators. Therefore, the recommendation remains open.
    Recommendation: To enhance interagency coordination on regulations issued pursuant to the Dodd-Frank Act, the FSOC should work with the federal financial regulatory agencies to establish formal coordination policies that clarify issues such as when coordination should occur, the process that will be used to solicit and address comments, and what role FSOC should play in facilitating coordination.

    Agency: Department of the Treasury: Office of the Comptroller of the Currency
    Status: Open

    Comments: In May 2015, FSOC created the Regulations and Resolutions Committee to identify potential gaps in regulation that could pose risks to the U.S. financial stability. The committee's duties include serving as a forum for information sharing and coordination among the FSOC staff, member agencies and other federal and state agencies, as appropriate, regarding domestic financial services policy development, and consulting, as appropriate, on the development of regulations to implement the Dodd-Frank Act's orderly liquidation authority. While the committee's duties should help promote greater collaboration, they do not constitute a formal rulemaking coordination policy addressing, for example, when coordination should occur, processes for soliciting and addressing comments, and FSOC role in facilitating coordination among and between the financial regulators. In its 2010 comment letter, FSOC noted that it provides a forum for interagency collaboration and consultation, in part through its committees, and has not indicated any plans to develop a formal rulemaking coordination policy as we recommended, in part because of its need to preserve the independence of the regulators. Therefore, the recommendation remains open.
    Recommendation: To enhance interagency coordination on regulations issued pursuant to the Dodd-Frank Act, the FSOC should work with the federal financial regulatory agencies to establish formal coordination policies that clarify issues such as when coordination should occur, the process that will be used to solicit and address comments, and what role FSOC should play in facilitating coordination.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: In May 2015, FSOC created the Regulations and Resolutions Committee to identify potential gaps in regulation that could pose risks to the U.S. financial stability. The committee's duties include serving as a forum for information sharing and coordination among the FSOC staff, member agencies and other federal and state agencies, as appropriate, regarding domestic financial services policy development, and consulting, as appropriate, on the development of regulations to implement the Dodd-Frank Act's orderly liquidation authority. While the committee's duties should help promote greater collaboration, they do not constitute a formal rulemaking coordination policy addressing, for example, when coordination should occur, processes for soliciting and addressing comments, and FSOC role in facilitating coordination among and between the financial regulators. In its 2010 comment letter, FSOC noted that it provides a forum for interagency collaboration and consultation, in part through its committees, and has not indicated any plans to develop a formal rulemaking coordination policy as we recommended, in part because of its need to preserve the independence of the regulators. Therefore, the recommendation remains open.
    Recommendation: To enhance interagency coordination on regulations issued pursuant to the Dodd-Frank Act, the FSOC should work with the federal financial regulatory agencies to establish formal coordination policies that clarify issues such as when coordination should occur, the process that will be used to solicit and address comments, and what role FSOC should play in facilitating coordination.

    Agency: Commodity Futures Trading Commission
    Status: Open

    Comments: In June 2016, CFTC officials stated that FSOC has written protocols for consulting on rules for which coordination is required under the Dodd-Frank Act. Specifically, in May 2015, FSOC created the Regulations and Resolutions Committee to identify potential gaps in regulation that could pose risks to the U.S. financial stability. The committee's duties include serving as a forum for information sharing and coordination among the FSOC staff, member agencies and other federal and state agencies, as appropriate, regarding domestic financial services policy development, and consulting, as appropriate, on the development of regulations to implement the Dodd-Frank Act's orderly liquidation authority. While the committee's duties should help promote greater collaboration, they do not constitute a formal rulemaking coordination policy addressing, for example, when coordination should occur, processes for soliciting and addressing comments, and FSOC role in facilitating coordination among and between the financial regulators. In its 2010 comment letter, FSOC noted that it provides a forum for interagency collaboration and consultation, in part through its committees, and has not indicated any plans to develop a formal rulemaking coordination policy as we recommended, in part because of its need to preserve the independence of the regulators. Therefore, the recommendation remains open.
    Recommendation: To enhance interagency coordination on regulations issued pursuant to the Dodd-Frank Act, the FSOC should work with the federal financial regulatory agencies to establish formal coordination policies that clarify issues such as when coordination should occur, the process that will be used to solicit and address comments, and what role FSOC should play in facilitating coordination.

    Agency: National Credit Union Administration
    Status: Open

    Comments: In June 2016, NCUA stated that it continues to work closely with the other federal financial agencies regarding rulemaking, and formally coordinates with them during joint rulemaking initiatives. Agency officials said they would comply with any future coordination guidance provided by FSOC. In May 2015, FSOC created the Regulations and Resolutions Committee to identify potential gaps in regulation that could pose risks to the U.S. financial stability. The committee's duties include serving as a forum for information sharing and coordination among the FSOC staff, member agencies and other federal and state agencies, as appropriate, regarding domestic financial services policy development, and consulting, as appropriate, on the development of regulations to implement the Dodd-Frank Act's orderly liquidation authority. While the committee's duties should help promote greater collaboration, they do not constitute a formal rulemaking coordination policy addressing, for example, when coordination should occur, processes for soliciting and addressing comments, and FSOC role in facilitating coordination among and between the financial regulators. In its 2010 comment letter, FSOC noted that it provides a forum for interagency collaboration and consultation, in part through its committees, and has not indicated any plans to develop a formal rulemaking coordination policy as we recommended, in part because of its need to preserve the independence of the regulators. Therefore, the recommendation remains open.
    Director: Mctigue, James R Jr
    Phone: (202)512-3000

    1 open recommendations
    Recommendation: To better ensure that economically similar outcomes are taxed similarly and minimize opportunities for abuse, the Secretary of the Treasury should undertake a study that compares the current approach to alternative approaches for the taxation of financial derivatives. To determine if changes would be beneficial, such a study should weigh the tradeoffs to IRS and taxpayers that each alternative presents, including simplicity, administrability, and economic efficiency.

    Agency: Department of the Treasury
    Status: Open

    Comments: Treasury disagreed with this recommendation based on the fact that many outside studies already exist and IRS did not comment. While Treasury disagreed with the recommendation, debate on tax reform, both in Congress and within IRS, continues and actions to ensure that economically similar outcomes are taxed similarly seem likely. GAO continues to maintain that further study is needed in coordination with IRS. If financial derivatives are included in tax reform, this could lead to savings for the federal government. GAO will continue to monitor progress on tax reform and whether it includes changes to the taxation of financial derivatives consistent with the recommendation.
    Director: Brown, Orice Williams
    Phone: (202)512-5837

    4 open recommendations
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to strengthen procedures in place to guide Reserve Banks' efforts to manage emergency program access for higher-risk borrowers by providing more specific guidance on how Reserve Bank staff should exercise discretion and document decisions to restrict or deny program access for depository institutions and primary dealers that would otherwise be eligible for emergency assistance.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to document a plan for estimating and tracking losses that could occur under more adverse economic conditions within and across all emergency lending activities and for using this information to inform policy decisions, such as decisions to limit risk exposures through program design or restrictions applied to eligible borrowing institutions.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff, in drafting regulations to establish the policies and procedures governing emergency lending under section 13(3) of the Federal Reserve Act, to set forth the Federal Reserve Board's process for documenting, to the extent not otherwise required by law, its justification for each use of this authority.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to document the Federal Reserve Board's guidance to Reserve Banks on types of emergency program decisions and risk events that require approval by or consultation with the Board of Governors, the Federal Open Market Committee, or other designated groups or officials at the Federal Reserve Board.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Brown, Orice Williams
    Phone: (202)512-3000

    1 open recommendations
    Recommendation: To help ensure that CFTC and SEC are strategically positioned to implement the joint report's recommendations and address remaining harmonization opportunities, as CFTC and SEC continue to develop the charter for the Joint Advisory Committee, the Chairmen of CFTC and SEC should take steps to establish, with associated time frames, clearer goals for future harmonization efforts and requirements for reporting and evaluating progress toward these goals. Specifically, the agencies could benefit from formalizing a plan to assess implementation of the joint report's recommendations and harmonization opportunities that may not have been fully addressed by the joint report, such as differences in market structure and investor definitions. Such a plan could include goals for future harmonization efforts, such as time frames for implementing the recommendations; assessment of whether remaining differences in statutes and regulations result in inconsistent regulation of similar products and entities that could lead to opportunities for regulatory arbitrage; and periodic reports to Congress on their progress, including the implementation and impact of the recommendations.

    Agency: Commodity Futures Trading Commission
    Status: Open

    Comments: In August 2014, CFTC staff confirmed that CFTC had not taken steps to implement this recommendation. According to CFTC staff, since the issuance of the GAO report in April 2010, CFTC has prioritized implementing Dodd-Frank Act requirements related to harmonization and has not established a plan or specific goals related to harmonization.
    Director: Williams, Orice M
    Phone: (202)512-5837

    1 open recommendations
    Recommendation: To address the current information gap in Regulation SHO for prime brokerage arrangements and mitigate the impact of any unintended consequences caused by SEC rules, as well as ensure consistent implementation of SEC rules by the industry, the Chairman of the Securities and Exchange Commission should finalize, in an expedited manner upon finalization of the temporary rule, the revised 1994 Prime Broker Letter.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: As of 7/18/13, the revised Prime Broker letter has not been finalized.